Top 10 Stocks to Buy According to Akre Capital Management

3. Moody’s Corporation (NYSE:MCO)

Number of Hedge Fund Holders as of Q4: 91

Akre Capital Management’s Equity Stake: $1.46 Billion 

Moody’s Corporation (NYSE:MCO), a leading financial services firm, reported strong financial results for 2024, driven by substantial growth in both its credit rating and analytics businesses. Total revenue reached $7.09 billion, marking a 20% increase from $5.92 billion in 2023. This impressive performance was fueled by gains across Moody’s Investors Service (MIS) and Moody’s Analytics (MA), which provide essential credit ratings and financial analysis tools. Moody’s ability to capitalize on market demand for data-driven insights and risk assessment solutions has solidified its reputation as a key player in the financial industry.

Moody’s Analytics division generated $3.3 billion in revenue, reflecting an 8% year-over-year increase, with strong contributions from its Decision Solutions, Research and Insights, and Data and Information segments. Meanwhile, Moody’s Investors Service reported an outstanding 33% revenue increase to $3.79 billion, benefiting from broad-based growth across Corporate Finance, Structured Finance, Financial Institutions, and Public, Project, and Infrastructure Finance. This surge highlights the continued reliance on ratings and analytics by Moody’s Corporation (NYSE:MCO) in global financial markets, reinforcing its competitive advantage.

Despite higher operating expenses, which rose by 15% to $1.95 billion, and an increase in selling, general, and administrative expenses to $1.74 billion, Moody’s Corporation (NYSE:MCO) delivered strong profitability. Operating income climbed 35% to $2.88 billion, while net income increased to $2.06 billion from $1.61 billion in the prior year. Diluted earnings per share grew to $11.26, reflecting the company’s ability to manage costs effectively while expanding its revenue base. Although its effective tax rate increased to 23.7% from 16.9% due to prior-year tax benefits, Moody’s maintained a strong financial position, ending the year with $2.41 billion in cash and cash equivalents.

As a global leader in credit ratings and financial intelligence, Moody’s Corporation (NYSE:MCO) continues to benefit from the growing demand for risk assessment tools and analytics, particularly in uncertain economic environments. With a solid track record of revenue and earnings growth, strategic expansion in analytics, and a strong balance sheet, Moody’s remains a top stock to buy for investors seeking long-term value and resilience in the financial sector.